InstaUpdate on SP500 Market Internals at Make or Break Level

Mar 11, 2011: 10:29 AM CST

The question on every trader’s mind is “Will the S&P 500 hold its critical support level at the 1,300 region or will it break lower sharply?”

It’s already lost the 1,300 area and – by a few points – lost the 50d EMA, but as we push to new lows on the morning session, Market Internals paint a surprisingly bullish picture which gives bulls a final ray of hope.

Let’s take an Insta-Check on current Market Internals – with the thought

“If bulls can’t capitalize on this, then they probably have no hope:”

We’re seeing the “Triple Three” of Breadth, TICK Extremes, and VOLD (Volume Difference of Breadth).

As the situation is developing quickly, I wanted to do a quick screen-snap and post at this “Make or Break” level.

Taking a look at all three internals, Breadth is higher as price made new lows;  TICK also is higher (I labeled the actual values of TICK lows); and VOLD is actually POSITIVE (short-term) today.

These are all hidden signs of strength that give the bulls a ray of hope in an otherwise gloomy sea of broken (temporary) support and bearish worldwide and domestic headline news.

If you’re not willing to step in with potential bulls, then look for a potential buy set-up on a break of the short-term falling trendline on a break-back above 1,300… and aggressive bears would likely stop-out on a return above 1,300 with further improvements in market internals.

And it’s that simple:

Either bulls/buyers step in here and take advantage of this little  nip under support that’s been met with triple-three rising/bullishly divergent market internals…

…or they can’t, which opens a play/trade at least to 1,280 today if not lower… with a potential collapse threat (feedback loop of selling) under 1,275.

If you’re able to view market internals on your chart-software, do so and monitor/trade the situation closely as it develops through the rest of the session.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available!

2 Comments

2 Responses to “InstaUpdate on SP500 Market Internals at Make or Break Level”

  1. Rick Says:

    Good post Corey. Really like your blog! Switched from fundies to technical about 16 months ago and have read every book by Wyckoff, Schabacker, Nelson, Elliot, Gann, and Linda Raschke, and while these books have helped me immensely, your blog has helped me a great deal too.

    Thank you for your hard work.

    Sincerely,

    Rick

  2. Amazingaw Says:

    Just purchased your book from Amazon, as I am getting a big fan of Market Internals Tech. BTW, what software are you using to view the market internals?

    Thank you for the great posts.

    Alex